diff -r 0b48e3985765 -r 7e1c8a565a4f mercurial/merge.py
--- a/mercurial/merge.py	Tue Mar 13 15:47:55 2007 -0500
+++ b/mercurial/merge.py	Tue Mar 13 18:50:02 2007 -0500
@@ -488,9 +488,9 @@
     if not partial:
         recordupdates(repo, action, branchmerge)
         repo.dirstate.setparents(fp1, fp2)
+        if not branchmerge:
+            repo.dirstate.setbranch(p2.branch())
         repo.hook('update', parent1=xp1, parent2=xp2, error=stats[3])
-        if not branchmerge:
-            repo.opener("branch", "w").write(p2.branch() + "\n")
 
     return stats